Rhetorical Q&A On The Future Of QE2 With Goldman's Jan Hatzius

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Sun, 11/21/2010 - 15:03 | 744714 Atomizer
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Strauss-Kahn on Europe's growth Challenges


The above circle jerk speaks

Soul Coughing - How Many Cans? To Kick?



Sun, 11/21/2010 - 15:13 | 744744 snowball777
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"...the check fat off of my slenderness."

Love that Doughty.


Sun, 11/21/2010 - 15:08 | 744731 99er
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Why Wait Until 7 December?

Ireland's biggest banks are facing collapse this week unless an immediate international bail-out package can be agreed, senior insiders have revealed.

Allied Irish Banks and Bank of Ireland have each suffered a multibillion-euro ‘run’ as foreign investors withdraw their cash amid fears that both institutions are effectively bust.

Read more: http://www.dailymail.co.uk/news/article-1331690/Ireland-bailout-Banks-brink-collapse.html#ixzz15wgFdiSc

Sun, 11/21/2010 - 15:28 | 744765 Dapper Dan
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Thousands of French protesters have taken up the former Man United footballer's call for a mass cash withdrawal.

As students and public sector workers across Europe prepare for a winter of protests, they have been offered advice from the archetypal football rebel Eric Cantona,  the now retired Cantona is urging a more sophisticated approach to dissent.

The 44-year-old former footballer recommended a run on the cash reserves of the world's banks during a newspaper interview that was also filmed. The interview has become a YouTube hit and has spawned a new political movement.

Cantona's call appeared to touch a popular chord and generated an instant response. Nearly 40,000 people have clicked on the YouTube clip, and a French-based movement – StopBanque – has taken up the campaign for a massive coordinated withdrawal of money from banks on 7 December. It is claimed that more than 14,000 people are already committed to removing deposits. The movement is also gaining increasing attention in Britain.


Ripped fromhttp://www.guardian.co.uk/world/2010/nov/20/eric-cantona-bank-protest-ca...

Sun, 11/21/2010 - 15:23 | 744758 LeBalance
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Under the question of "inflation concerns" confidence was not mentioned.  Hopefully, these folks "get" the concept of money printing == monetary inflation, that's level 1.  But it is very important to look at the quality of the money base as it is being drastically degraded.  Not only is it being increased, it is being built with LSAPs that are toxic.

This is a classic recipe for a "snap" in the confidence rubber band. (h/t FOFOA).  This instantaneous event, the "snap" in confidence, is the hyperinflation "Black Swan."  It is a foregone conclusion that no one will want to hold a currency (eg. $) whose backing is such dreck.

So inflation in the first level is money printing, sure.  But deep in the dark basement of the Fed, lurks inflation's dark shadow.  That shadow is realized when confidence evaporates and it is hyperinflation.

So you CAN have both deflation, inflation, and hyperinflation.  Let's say deflation in tha total value of real estate property values, inflation in overall monetary supply (consumer plus government) and then hyperinflation (caused by a lack of confidence and an exodus from a particular currency).

The social impact planet wide is being felt now, but what is coming is unimaginable.

:) LB

Sun, 11/21/2010 - 15:26 | 744763 ZeroPower
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Indeed. Deflation now, inflation is the near future, and hyper inflation coming (in theory, only).

Why we will never get to hyper inflation is because these LSAPs will stop well before employment is at its norm. Unless we reach the NAIRU anytime soon (we won't, we = usa), there is very very slim risk of this QE being hyper inflationary.

Does the gov manipulate CPI figures? Is the fed printing away its troubles? Sure. But there is literally no other better option right now.

Lets just hope it doesn't get to $2Trn until QEx.

Sun, 11/21/2010 - 15:33 | 744762 doolittlegeorge
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first off "the cartoon variant was much better."  Second "since Goldman is being paid to run our Treasury" they're "being paid to be right."  Are they? Or "are they as wrong as..."  If it's the latter "precisely what skin do they have in this fight institutionally?"  Given Lloyd Blankfein's testimony before the our Represtantives in DC this Spring--seems like years ago now- ("see this dollar sign on my left butt cheek mo fo?  why don't YOU just...") i'd say HE'D say "not one friggin' cent!"  Which "leads us to number three."  Why are we listening to them when they don't give good investment advice and "in fact give intentionally bad advice when they feel it suits their interests" as "per their testimony before the United States Congress"?  Which "leaves us with question number 4" and the only one that matters and all you should have asked:  "how are you not phucking us right now?"  Or perhaps even better "as you phuck us right now precisely how are you doing it because I want in on it."  Needless to say if you were to ask "The Goldman Sachs" what they're business policy on "bailing out clients is" I think you'd get a "slight variation from the way they look at government bailouts."  In short "at what point does our entire Treasury Department start looking for an exit strategy...and to where exactly."

Sun, 11/21/2010 - 15:30 | 744772 Amish Hacker
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"The shift in the composition of the private sector’s asset holdings from longer-term Treasuries to cash should raise the price (lower the yield) of longer-term Treasuries. "

What am I missing here? Seems like if everyone sells the 30-year and goes to cash, then the 30-year goes down in price (i.e. yields increase). 

Sun, 11/21/2010 - 15:51 | 744797 ZeroPower
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The Fed wants depressed treasuries (as you note, high Px low yield). As the private sector is selling their USTs, the Fed is buying them up - with both hands and feet. Note so far QE2 purchases (officially anyway) are for the medium term treasuries - not too far out on the curve (30s should be dropping).

Sun, 11/21/2010 - 17:35 | 744944 Amish Hacker
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Thanks, ZP. I see your point, but it makes me even Q-wheezier to think about it. His statement could be rephrased as, "We are going to keep interest rates low by transferring ownership of longer-term treasuries from private hands to the public balance sheet. This will be great for the economy."

This won't end well.

Sun, 11/21/2010 - 15:33 | 744775 Thomas
Thomas's picture

Sorry. Couldn't stomach it after awhile and am still going to comment--a cardinal sin under most circumstances, so I'll keep it short: What a sack of shit. Lies. You Goldman guys--I know you are reading this--should be hung from the necks until dead. We could have a trial later if need be. Bite me.

Sorry. I am normally civil, but this PR blitzkrieg has got me a little edgy. You get Ben's op ed. Then you get Blinder's op ed. Now you get this unadulterated bullshit.

Sun, 11/21/2010 - 15:45 | 744790 no cnbc cretin
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Sun, 11/21/2010 - 17:13 | 744916 treemagnet
treemagnet's picture

Couldn't agree with you more. 

Sun, 11/21/2010 - 22:06 | 745289 Mark Medinnus
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Ditto, my ass. The correct reply is f*ckin a 

Sun, 11/21/2010 - 15:38 | 744781 etrader
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 "the Dutch strategist"

Thought  Hatzius was from Deutschland.....?

Sun, 11/21/2010 - 15:44 | 744787 curious1
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New large species of squid found

Squid of this type have light-producing organs to attract prey....

A new species of squid has been discovered by scientists during a research cruise in the southern Indian ocean.

The 70cm-long specimen is a large member of the chiroteuthid family.

Squid from this group are long and slender with light-producing organs, which act as lures to attract prey.

It was found during analysis of 7,000 samples gathered during last year's Seamounts cruise led by the conservation group IUCN.

The project started a year ago when marine experts embarked on a six-week research expedition in the Indian Ocean.

The aim of the cruise was to unveil the mysteries of seamounts - underwater mountains - in the southern Indian Ocean and to help improve conservation and management of marine resources in the area.

"For 10 days now 21 scientists armed with microscopes have been working through intimidating rows of jars containing fishes, squids, zooplankton and other interesting creatures," says Alex Rogers, of the Department of Zoology at the University of Oxford,

"Many specimens look similar to each other and we have to use elaborate morphological features such as muscle orientation and gut length to differentiate between them."

So far, more than 70 species of squid have been identified from the Seamounts cruise, representing more than 20% of the global squid biodiversity.

Sun, 11/21/2010 - 15:50 | 744796 Chuck Bone
Chuck Bone's picture

Sorry GS, I'm not buying it. This report is the crack dealer explaining to the taxpayer why the government crack addict needs to keep buying money/crack from them on the backs of its citizens.  The banks created this crisis through idiotic lending, moronic derivative creation and doing everything they could do generate more commissions and siphon more wealth from the general populace. QE/QE2/TARP, etc isn't intended on doing anything for the economy, the only purpose is to prevent/forestall the collapse of the big banks because they hold so much of that worthless MBS, but unlike the hedge funds and pensions that bought them they hold the special status of "bank" so their stability is "crucial" to the financial system at large and if they fail all is lost.

People always do what is best for themselves... and who is in charge of the central bank?  Oh that's right... partners of the big banks! This is nothing other than a way of just stealing wealth from the people to cover bad bets under the guise of helping them. There's a special place in hell for these charlatans.

Sun, 11/21/2010 - 16:49 | 744885 buzzsaw99
buzzsaw99's picture

crack dealers and crack whores are legitimate business people, the squid is not. Comparing the two is an insult to the former group, not the latter.

Sun, 11/21/2010 - 15:51 | 744798 Careless Whisper
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Q: How's that insider trading thing going for Goldman?

A: Matt Tabibi has something to say about that:


Sun, 11/21/2010 - 16:04 | 744822 DisparityFlux
DisparityFlux's picture

Jan better keep his day job.

This rhetorical Q&A routine will never be popular on the vaudeville circuit.

Can he do this routine with a ventriloquist dummy or a pratfall clown?

Sun, 11/21/2010 - 16:47 | 744879 DisparityFlux
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Let me guess.

Stan's playing Lloyd and Laurel's playing Ben.

Sun, 11/21/2010 - 19:32 | 745097 Optimusprime
Optimusprime's picture

That's Stan (Laurel) and Ollie (Hardy).  There--corrected for you.

Sun, 11/21/2010 - 16:50 | 744887 Reese Bobby
Reese Bobby's picture

Goldman's money machine has been challenged.  They are betting this year's comp on a leveraged bet on a low vol scenario for MBS.  No fuckin worker bee/ecomonist will be allowed to screw with that. It is simple game theory: we are right, or I take my lack of morals somewhre else...

Sun, 11/21/2010 - 17:10 | 744911 Bruce Krasting
Bruce Krasting's picture

Jan missed the QE number by a mile. Why? The new wild-card in Fed policy is public opinion. From overseas finance ministers to the blogs. QE2 was D.O.A.

That wild-card is now a permanent card in the deck. The boys at Goldman, Ben Bernanke and the others at the Fed have to adjust to that reality.

I would score "1" for the blogs. Tks ZH.



Sun, 11/21/2010 - 18:11 | 744961 DisparityFlux
DisparityFlux's picture


Isn't this just covering debt payments due now by pushing its complete repayment further into the future on the hope we will create wealth in order to afford paying the future debt or the debt becoming someone elses' loss?

And the debt payments made now are more affordable with reduced credit cost and favorable deficit accounting.

Its seems the modern monetary system is perpetual motion founded on obscuration and blind faith -- the currency portion being just a tedious artifact.

This I believe people can accept.  What most have problems with are the methods employed to create wealth, who are getting wealthy and at whose expense.

Sun, 11/21/2010 - 22:05 | 745288 Downtoolong
Downtoolong's picture

I believe Goldman's basic goal in the markets is to stir it up and keep everyone off balance as much as possible as often as possible. More uncertainty & change = more trading & transactions = more profits for Goldman. They have 1000 exotics ways to do it, but, the purpose is always the same. As long as they keep fanning the flames beneath everyone's feet, the markets will dance. 

Mon, 11/22/2010 - 01:40 | 745650 EZYJET PILOT
EZYJET PILOT's picture

What a twat!

Mon, 11/22/2010 - 15:54 | 747286 bluprint
bluprint's picture

The shift in the composition of the private sector’s asset holdings from longer-term Treasuries to cash should raise the price (lower the yield) of longer-term Treasuries.


If the private sector has less demand for treasuries, that should lower the price not raise it. Hello? 

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